ENVALITH
セントラルスポーツ株式会社 logo

CENTRAL SPORTS CO.,LTD.

4801・Prime Market・Services

Official website
セントラルスポーツ株式会社 logo
CENTRAL SPORTS CO.,LTD.4801

Business

Central Sports Co., Ltd. is a pioneer in the fitness industry, founded in 1969. It operates a nationwide network of 257 locations in total, consisting of 187 directly-operated locations (27 company-owned and 160 tenant-based) and 70 contracted-service locations (14 private and 56 public). The company is organized into five divisions—Fitness Division, School Division, Contracted Services Division, Pro Shop Division, and Other Division—and upholds a management philosophy of "lifelong health from age zero," serving customers from children to the elderly. Its main customer base consists of fitness members (machine gyms, studios, pools, etc.) and school members (swimming, physical education, dance, etc.), while contracted operation of public facilities for local governments also forms part of its revenue base.

Business Model

Of net sales of ¥48,865 million, the Fitness Division (¥23,602 million) and School Division (¥14,790 million) account for the core, underpinned by stable recurring revenue from monthly membership fees. The Contracted Services Division (¥7,050 million) secures fixed commission income by providing instructional know-how to private and public facilities. Capital expenditures are allocated to new store openings and renovations of existing stores, with the structure designed to build up revenue by maintaining and expanding membership numbers and retention rates through improved customer satisfaction and prevention of member churn.

Company Strengths

Founded in 1969, the company has led Japan's fitness industry as a pioneer. It operates a nationwide network of 257 stores in total, comprising 187 directly-operated stores and 70 contracted-operation stores, and became the first in the fitness club industry to obtain ISO9001 certification in 1999. Its long-accumulated operational know-how and nationwide store network form an entry barrier that is difficult for competitors to replicate in a short period.

The company operates 56 public sports facilities under contracts with local governments for facility management, pool monitoring, and similar services. Contract terms extend up to 15 years, securing stable contracted-fee revenue that is less susceptible to economic fluctuations. Contracted Services Division sales reached ¥7,050 million (up 10.8% year on year), recording the highest growth rate among all divisions.

The company operates the Central Sports Research Institute, established in 1982, with its Academy Department overseeing quality control of exercise programs. R&D expenses for the fiscal year under review amounted to ¥128 million. The company continuously develops proprietary programs such as the Medical Fitness Series and EXCITE Series, aiming to expand its customer base and differentiate itself from competitors.

ENVALITH's Perspective

Operating profit for FY2026 (ending March 2026) rose sharply to ¥2,680 million (up 37.7% year on year), and the operating margin also improved to 5.5% (from 4.2% in the previous period). Meanwhile, profit attributable to owners of parent came in at ¥1,284 million (down 5.5% year on year). This was mainly because total income taxes were a negative ¥309 million in the previous period due to factors such as the reversal of deferred tax assets, whereas the current period saw a tax burden of ¥715 million. Attention should be paid to the divergence between the increase on an ordinary profit basis (up 48.1% year on year) and the decline in net profit.

In terms of the market environment, the overall recovery trend in the fitness industry, driven by growing health consciousness and expanding interest in exercise habits, is an external tailwind for the company. On the other hand, rising energy prices and raw material costs, combined with wage increases stemming from higher minimum wages, are expected to continue pressuring the cost structure. The forecast for FY2027 (ending March 2027) calls for profit growth, with net sales of ¥50,500 million (up 3.3% year on year) and ordinary profit of ¥2,700 million (up 19.6% year on year), but the company's ability to execute cost management will be key.

The annual dividend for FY2026 (ending March 2026) was reduced to ¥40 (from ¥50 in the previous period), and the payout ratio declined to 34.9% (from 41.2% in the previous period). Total dividends paid also decreased to ¥448 million (from ¥560 million in the previous period). The forecast for FY2027 (ending March 2027) maintains the dividend at ¥40 (payout ratio of 30.5%), unchanged from the prior plan. As this dividend cut comes amid a year-on-year decline in net profit, a cautious assessment is warranted from the standpoint of shareholder returns. On the other hand, it can also be interpreted as reasonable from the perspective of strengthening the financial base and securing capacity for investment.

Growth Strategy

Capturing health-related demand across all generations through expansion of the 24-hour format, deepening of public facility contracted services, and development of new services

By expanding the small-scale, 24-hour operating format, the company aims to capture a customer segment different from that of existing comprehensive sports clubs. In FY2026 (ending March 2026), new outlets opened in Ome and Kita-Sendai Station. The company continues strategic openings in response to the industry-wide trend toward expansion of small-scale store formats in the fitness industry.

While continuing renovation investment in existing store facilities (acquisition of property and equipment of ¥1,773 million), the company aims to achieve both new member acquisition and prevention of withdrawals by strengthening customer service, instructional capabilities, and facility aesthetics. The company seeks stable expansion of membership fee revenue through improved customer satisfaction.

The company is promoting diversification of ancillary revenue through original events such as "Wellness Style Challenge" and "Lesson in Japan," as well as expansion of tourism business and online services. New business development through collaboration with regional and educational fields is also anticipated.

The company will continue accepting contracts for the management of public sports facilities while scrutinizing profitability. While contracts for 4 facilities will end as of the end of FY2026 (ending March 2026), new contracts will also be undertaken. The company aims to improve overall profitability of the contracted services business by streamlining low-profitability contracts and concentrating on highly profitable projects.

Last updated: July 19, 2026